10:51 ET Nortel Networks (NT) 13.58 +0.17: Company announces that it will reprice employee options: employees will be able to
voluntarily cancel old options and receive new options that will be issued on a date which is at least six months plus one day from the
cancellation date.
10:49 ET Sector Watch: Oil Service : Early positive news in the sector (see 9:02 comment) inspires strong push. Although some profit
taking seen, only minimal weakness noted. Pacing the way are RDC (+3.9%), CAM (+3.8%), GLBL (+3.5), HAL (+3.5) and NE
(+3.4%).
10:38 ET Check Point Sftwr (CHKP) 51.16 -4.01: -- Update -- Hearing that selling pressure was created by a report released late Friday
by Off The Record Research, an independent research firm; report apparently claimed that the firm's surveys have revealed a 10-point
slowdown in CHKP sales growth from Q1 to Q2; says that shift from firewall to VPN puts CHKP in a more competitive environment; also
notes price discounting from CHKP. Hearing that CSFB just came out in defense of the stock, but did not specifically mention this report.
10:36 ET Nasdaq Composite : -- Technical -- Index filled the May 30 gap (2170) in early dealings but failed to develop any follow
through interest and is now back flirting with congestion near the 2140/2138 area. While holding thus far, the loss of leadership from the key
semiconductor sector and the pattern of the gains over the last several days are concerns. Initial support on a break is at 2128/2125 with a
critical short term support at 2100.
10:23 ET Check Point Sftwr (CHKP) 51.00 -4.17: Stock showing relative weakness today, hearing different stories about potential
brokerage firm action on the stock or a negative report from an independent research firm; none of this is confirmed -- Briefing.com
continuing to work on the story.
10:18 ET Yahoo Upgrade : Only seeing a mild reaction to the Cowen upgrade of Yahoo and talk of Internet ads bottoming: YHOO +0.47,
DCLK +0.73, GOTO +2.49.
10:12 ET Sector Watch : The major indices have reversed course and pushed into negative territory following a modestly positive start.
The decline in the key semiconductor sector has weighed with the other tech sectors also pushing into the red. Also losing ground are
alternative energy, paper, retail, airline and consumer goods. Pacing the way on the upside are oil service, oil, natural gas, biotech, gold and
insurance.
10:05 ET Challenger Layoffs : Challenger reports layoff of 80,140 in May, down 52% from April; sharp decline vs April is not as
significant as it might seem given tremendous monthly volatility in these data; trend changes can only be identified with confidence after several
months of data.
09:47 ET Nokia (NOK) 29.07 +0.34: -- Update -- Merrill Lynch makes comments on NOK after the company presented at its London
conference; Merrill says that Nokia is continuing to get market share and its competitive situation is better than it has ever been; company
reiterates expectation of 450 mln handset units in 2001. Reiterates NT ACCUMULATE/LT BUY.
09:28 ET Communication ICs : Several negative brokerage firm comments on the sector this morning: aforemented Goldman estimate cuts
on BRCM, Morgan Stanley initiation of AMCC with a NEUTRAL and low estimates on the Street, and Thomas Weisel Partners esimate
cuts on BRCM and PMCS due to sluggish sales.
09:25 ET Level 3 Comms (LVLT) 11.28: A Denver Post article this morning catalogs the company's woes and mentions rumors that
LVLT will lay off 600-1000 workers at its Broomfield, CO headquarters.
09:22 ET Amphenol (APH) 50.40: Sources at CSFB telling Briefing.com that the firm just cut estimates on APH citing weakness at its
biggest customers -- ERICY, NOK, SUNW, MOT; Q2 goes to $0.55 from $0.58, FY01 to $2.50 from $2.70, and FY02 to $3.26 from
$3.40.
09:19 ET Intel (INTC) 28.74: -- Update -- Bear Stearns reduces estimates to reflect weaker than expected PC demand in April/May and
to account for aggressive pricing; Q2 to $0.10 from $0.11, FY01 to $0.52 from $0.55, and FY02 to $0.75 from $0.80.
09:13 ET Gapping : Gapping Up: SPLX +14% on pdt announcement, Robbie price target increase; YHOO +5% on Cowen upgrade;
ORCL +4% as fears of a warning ebb; ELNK +4% on Goldman Sachs initiation. Gapping Down: CPST -6% on Merrill downgrade; CY
-5% on earnings warning.
09:02 ET Sunoco (SUN) 39.43: Oil is where the upside preannouncements are today: VLO, WHES, and now SUN: company says Q2
earnings will be in the $1.75-2.25 range vs current First Call estimate of $1.63; Sunoco also notes that it expected to have fully utilized its
remaining $150 mln share repurchase authorization by the close Q2.
08:57 ET Morgan Stanley on Groceries : Morgan Stanley downgrades food retail sector to Market Weight from Overweight, citing lack
of catalysts. Also downgrades two group members: Kroger (KR 25.00) and Safeway (SWY 50.28) to OUTPERFORM from Strong Buy.
08:55 ET AOL Time Warner (AOL) 52.75: Robertson Stephens says that price does not reflect ongoing business risks stemming from
ongoing weakness in the broad advertising market. Merrill Lynch makes positive comments about AOL, citing impact of declining network
costs.
08:45 ET Micron Tech (MU) 39.20: Bear Stearns slashing estimates on MU; FY01 goes to $0.27 from $0.65 and FY02 to $0.68 from
$2.00 to reflect weak demand and declining prices; would be buyers of the stock below $35.
08:42 ET Valero Energy (VLO) 44.73: Company expects Q2 earnings to exceed $4/share, up from prior guidance of $3.25-3.75; says
that refined product margins were very strong in May.
08:41 ET SIA Data : Many brokerage firms commenting on the SIA data released late Friday; Morgan Stanley says that worldwide sales of
$13.7 bln for April were 4% lower than expected and says that negative Q2 earnings surprises are likely. Banc of America Securities cuts
industry forecast to -25% for 2001 from -17%; says that stocks have priced in the inflection point and that sustainable upside will need help
from the end-markets.
08:40 ET Opening Indications : S&P futures at 1268, trade six points above fair value while the Nasdaq 100 pre-market indicator is
higher by 14.2 points. Comments from Alan Greenspan that inflation is not a concern are contributing to a bullish bias in early activity.
08:35 ET Extreme Networks (EXTR) 30.30: Morgan Stanley says Extreme's qtr is on track to meet estimates of $112.1 mln revenues
and $0.01 EPS, but says that stock is close to fair value at current levels.
08:30 ET Mattel (MAT) 17.91: USB Piper Jaffray upgrades MAT to STRONG BUY from Buy with EPS estimates of $0.79 for FY01
and $1.00 for FY02; says turnaround and confidence are gaining momentum.
08:29 ET Lifepoint Hospitals (LPNT) 33.20: Chairman and CEO Jim Fleetwood died of a heart attack on Saturday; DeWitt Ezell, former
President of Tenn BellSouth Telecom elected to serve as interim Chairman.
08:24 ET Compaq (CPQ) 15.90: Merrill Lynch says that after a meeting with management it believes that estimates of $0.05 for the Jun qtr
and $0.45 for the year remain safe, but says there could be some risk to to its product revenue forecast of $7.4 bln due to inventory
reductions.
08:13 ET Yahoo! (YHOO) 19.46: SG Cowen upgrades YHOO to a NEUTRAL from a Sell; says Internet advertising channel checks
reveal that budgets have stabilized and believes YHOO will make its Q2 results and will indicate better H2 visibility. Q3 will still be seasonally
weak, but Fortune 500 ad dollars are starting to flow.
08:08 ET Cypress Semi (CY) 21.60: CY warns that Q2 revenues will be in the $175-185 mln range with EPS of breakeven to $0.02 vs
current First Call estimates of $202 mln and $0.03; company says that business conditions have not materially improved in the market
segments that it serves.
08:02 ET Capstone Turbine (CPST) 34.03: Merrill Lynch downgrades CPST to a NT ACCUMULATE from Buy and cuts
numbers; now expects 2,100 total unit shipments in 2001 and 4,100 in 2002; FY01 estimate is now ($0.40) and FY02 is ($0.05). Merrill
says competition from incumbents such as Caterpillar (CAT) is stiff; CPST's technology is new, and while interest is strong, they sense
adoption is slower than expected.
07:56 ET Broadcom (BRCM) 33.77: Goldman Sachs reduces estimates due to the ongoing enterprise and cable market inventory
corrections that are likely to cause BRCM to miss Goldman's previous estimate of a 23% sequential decline; FY01 estimates
reduced from $1.1 bln and ($0.04) to $952 mln and ($0.20); FY02 from $1.3 bln and $0.30 to $1.1 bln and $0.20.
07:50 ET Communications Components : Lehman says that the communications components companies are facing a difficult Q2 with no
signs of improvement near-term; recommends the CPE players with strong product cycles (ISIL, MRVL) and avoid the telecom sector
except Agere (AGRA) on valuation.
07:47 ET Intel (INTC) 28.74: Goldman Sachs previews Intel's first-ever scheduled mid-qtr business outlook update on Thursday:
Goldman don't see how the news can be good; says that after a brief respite in late-March/early-April, PC data points have been
almost universally negative; believes Intel will not break prior guidance range but could see cut off the top half of the guidance range.
07:46 ET Simplex Solutions (SPLX) 28.00: Robertson Stephens reits BUY and raises price target to $33.50 ahead of today's 8:00ET
conf call which is expected to detail a new technology announcement; call-in number is 719-457-2633, passcode: 498298; firm sees
significant mkt opportunity for Simplex's design tools and svcs and believes their main development partner was Toshiba and that Simplex has
also enlisted other partners including Tensilica, Virtual Silicon, Numerical Technologies (NMTC), Applied Materials (AMAT) Dupont
Photomasks (DPMI) and KLA Tencor (KLAC).
07:44 ET Titan Pharm (TTP) 30.25: Reported over the weekend at the American Society of Gene Therapy conference favorable results
from two preclinical studies using TTP's RB94 cancer therapy to arrest growth of tumors in head and neck squamous cell carcinoma and
pancreatic cancer.
07:43 ET EarthLink Ntwrk (ELNK) 13.31: Goldman Sachs initiates coverage of ELNK with a TRADING BUY rating as its expects that
a $2 price increase on the basic service by the beginning of 2002 could boost 2002 EBITDA to $95mm (up from $25mm w/o increase)
which will serve as catalysts for the shares.
07:41 ET Cisco Systems (CSCO) 18.85: -- Update -- Britain's Sunday Business reporting that Cisco is considering a bid for Marconi
(MONI), but Briefing.com sees little about this deal makes sense. There is too much overlap in products between the two companies, and
Cisco buys technology not market share. Also, Cisco has indicated that it would not make any acquisitions at the same time that it is laying off
employees. Perhaps the layoffs have ebbed, but making its largest purchase ever just after the recent layoffs would seem highly unlikely.
07:27 ET DuPont (DD) 46.07: According to the WSJ a number of companies are looking to bolster their drug pipeline through
the acquisition of the DD drug business including: Bristol Myers, Novartis and Bayer, with the selling price now expected to exceed $6 bln.
07:26 ET Oracle Corp (ORCL) 15.86 +0.56: Robertson Stephens remains cautious on ORCL; firm thinks that the May qtr-aside
from the $0.03-$0.06 EPS miss expected by the Street-will be light on the top line; believes stock is fairly valued at current levels given the
high degree of uncertainty about the business and risk to ests. Does note however that on Fri, ORCL announced plans to report Q4:F01
results on June 18 th -suggesting that the co will not pre-release earnings or provide commentary on the qtr for another two weeks. Although
it is possible that ORCL does in fact pre-announce, this was a positive surprise.
07:09 ET Greenspan on Inflation : Fed Chairman, Alan Greenspan said at the International Monetary Conference in Singapore that the
Fed did not see any significant inflationary pressures at the moment and added that higher energy prices could further damage US economic
growth according to the Wall St Journal.
06:20 ET U.S. Markets : S&P futures trading at 1266.50, 4.5 points over fair value, Nasdaq 100 futures trading at 1861, 18.0 points over
fair value. The 30-year bond is up a tick at 5.700%. The dollar is firmer against the yen, but weaker against the euro.
06:19 ET European Markets : FTSE +0.59%, DAX +0.69% -- European stocks mostly higher in fairly quiet trading with a number of
major markets including France, closed for holiday. Oil stocks boosted by a rise in crude on the back of Iraq’s decision to stop oil supplies
following the UN Security Council’s decision to only extend the oil-for-food program by a month instead of the usual six months. Also faring
quite well today has been Marconi, the UK’s leading phone equipment company. A report in the Sunday Business newspaper said Cisco
Systems may make a GBP12 bln offer for Marconi.
06:18 ET Asian Markets : Nikkei +0.38%, Hang Seng +0.50% -- Asian stocks mostly higher in lackluster trading. Markets boosted by
late-Friday run-up in US shares. Defensive shares (particularly pharmaceuticals and oil) outperformed in Japan, while bank stocks remained
under pressure. Singapore boosted by better buying in heavyweights such as Singapore Telecommunications as well as China-related stocks.
China-based companies also helped to lift Hong Kong higher, while Korea’s Kospi was supported by better foreign buying.
01:24 ET Genentech (DNA) 50.55: One of the many stocks to receive positive mention in this week's Barron's... Others include Biogen
(BGEN) 61.23, Western Wireless (WWCA) 41.84, Genuity (GENU) 3.42, Nextel (NXTL) 16.14, BellSouth (BLS) 40.56, Verizon (VZ)
54.74, Broadwing (BRW) 24.77, Allegiance (ALGX) 15.31 and SBC (SBC) 42.05.
01:06 ET Hotel Industry : PricewaterhouseCoopers plans to release a study this morning which shows that Q2 financial results for the
lodging industry will be the worst in nearly a decade, reports the Wall Street Journal... Firm forecasting that revenue per available room will
fall by 1%... Factoring in inflation, the drop will be the biggest since the third quarter of 1991... Major trouble spots for hotels include New
York, San Francisco and Detroit... Companies seen being hit the hardest by the slowdown include Hilton (HLT) 12.29, Starwood (HOT)
37.58, and Marriott (MAR) 46.64.
00:42 ET Cisco Systems (CSCO) 18.85: According to its Q3 10-Q, filed Friday, company sees no end to the slowdown in spending by
telecommunications companies, reports Wall Street Journal... Company noted that inventories remain "higher than our current sales forecasts"
and could result in additional write-offs. |
